A Revolution in Retail (and Beyond): Some Key Omnichannel Dynamics

BrandPost By Brian Pagano
May 05, 2017

APIs form the foundation for building an “outside-in” approach to meeting customers’ expectationsrn

In a previous article we discussed how important the “outside-in” approach of understanding customers’ expectations is to omnichannel retail in a variety of subsectors (apparel, grocery, and malls). Across retail, the cool and differentiated customer experiences that enable seamless interaction with customers, regardless of whether they’re in a retail store, on their laptops, or on their phones, are enabled by APIs.

To deliver the constantly evolving and highly unified experiences customers expect, businesses need their digital assets to be flexible, able to be mixed and matched to build new products and services—and offer them however and wherever the customer demands. Getting different systems to exchange data and form a cohesive experience for the end user requires APIs. They are the foundation upon which an outside-in approach is built.

Here, I’ll summarize some of the overall key dynamics of API-enabled digital transformation in modern B2C commerce—and some of the powerful abilities it enables for omnichannel retailers.

It’s the NPS, stupid

Ideally, digital transformations are directly tied to immediate revenue—but it doesn’t always work this way. Sometimes the revenue will come from slower and sometimes painstaking investment in building the right business structure. Investing to achieve this then becomes an act of faith: the company has to believe in a positive outcome.

So, net promoter score (a methodology to snapshot a user’s reaction to the online experience they just had), and the costs required to achieve that NPS, become key metrics to justify the investment in the program and measure its progress. Closely aligned with this is the fact that much of the necessary investment is coming from marketing and product budgets (with the “product” being the store’s digital presence) rather than from IT, as has historically been the custom for cloud expansion.

The real work is…

… in the organization. Though implementing the technology to enable digital transformation might not be easy, it is generally a known industrial process at this point, and just takes good planning and execution. Overall, there will probably be much more effort necessary within the social structures of the company—evangelizing, regrouping, aligning, and retraining—based on the post-transition business operations picture.

Move from multichannel to omnichannel

Should retailers agonize over whether they can cater to demand for new customer experiences, and from new customers, given the need to serve existing customers? No, they don’t have this luxury, because their customers are changing every day, and the Internet of Things (IoT) is already happening. So, retailers don’t see this as a “pick a customer” problem.

Yet they may need to deal with some internal conflict as they subsume older, existing channels into the new model. Historically, each customer access vehicle (direct mail campaigns, paper catalog, web, and physical retail) was a separate line of businesses, and structured accordingly. That’s changing as companies seek to unify into a single operational capability, to maximize agility and efficiency. This is why Apigee prefers to use the term “omnichannel” to refer to the pattern that many call “multichannel.”

Mass personalization

Though it may seem a contradiction in terms, mass personalization is really just a completely individually targeted and specific response that is affordable and feasible at massive scale. Since ancient times, deals have closed because of the best sellers’ abilities to determine an offer the buyer can’t refuse.

With today’s technology, offers and insights on buyer behavior and preferences can be extremely precise and highly customized to each buyer and in real time (rather than having to wait days, weeks, or months for something out of a data warehouse or data mart). As a consumer, you can see this as an insidious intrusion into privacy or useful (why waste time on irrelevant offers? and of course you want the best deal!). However it’s viewed, it’s here to stay.

A revolution beyond retail

Omnichannel retail is a hallmark use case that the industry views as a kind of Holy Grail for early 21st century shopping. API-controlled data must underlie all of this; it’s the key to the user experience.

There are logical ways to structure these API controllers to enable social efficiencies within your organization, and minimize back-end perturbation but maximize reuse of existing resources, all while capitalizing on a Darwinian riot of user-facing applications. Retailers that put in the effort are better equipped to compete for the all-important customer, can be smarter about how to manage each customer opportunity, and are much better equipped for the economic realities of 21st century global business expansion (moving into new markets and operating geographies).

Looking forward, it’s worth noting that almost everything we discussed applies outside of retail, as well. Essentially every sector of our economy, and even civilization, is going through similar evolutions and revolutions. You should be able to spot these dynamics happening just about everywhere.

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